ALREADY suffering from the effects of the global economic crisis and a tarnished reputation, Cyprus received another body blow in the British House of Lords on Thursday.
Following last Tuesdays bombshell that the changes to property laws being planned by the Cyprus government will bring no relief to existing buyers, British peer Lord Jones of Cheltenham has called on the UK Government takes positive steps to protect British citizens by:
- Closing down the UK offices of Cypriot companies selling property.
- Banning the promotion of Cyprus property at overseas property exhibitions.
- Increasing the warnings to those contemplating buying property in Cyprus of the risk of losing their homes.
In three written questions tabled in the House of Lords on Thursday, Lord Jones also asked the British government to work with its EU partners to bring pressure of the Cyprus government to prosecute individuals who have retained Title Deeds after completion of property sales.
OVERSEAS property sales are a major contributor to the island’s economy.
After Spain and France, Cyprus used to be the most popular place for Britons seeking a place in the sun and it has been estimated that over 60,000 have bought property on the island. Although their appetite started to cool at the beginning of 2004, Britons still make up the majority of overseas property investors.
Closing down Cypriot companies in the UK and banning the promotion of Cyprus property at overseas property exhibitions will have disastrous consequences on property sales and the island’s economic well-being.
ON MANY occasions successive governments have ‘promised’ to clean up the property industry, but to date, these promises have proved to be no more than hot air.
- In October 2005, the Cyprus Government said it was going to plug loopholes in the law, introduce fines, and provide property buyers what it called ‘an arsenal of weapons against unscrupulous property developers.
- In September 2007, the Government said it was going to look at providing greater security to homebuyers by enabling their Contracts of Sale to take precedence over the developers’ mortgages.
- In June 2008, Interior Minister Neoclis Sylikiotis assured property buyers that newly proposed legislation to resolve problems in the property sector could be implemented by the end of the year.
- In January 2009, the Interior Ministry gave its assurances to the British High Commissioner that it intended to introduce a Bill to address the Title Deed issue.
- In April 2009, Interior Minister Neoclis Sylikiotis qualified his earlier assurances to the British High Commissioner by saying that the Bill will only apply to future cases.
Law reform is long overdue
Although they have attracted more interest in recent years, property problems have been around for a long time.
When Pieris Estates went under back in the 1980s, the bankruptcy soured diplomatic relations with Kuwait as many of those who had bought property from the company were Kuwaiti. The affair continued until 2006 at which time the European Court of Human Rights ordered the Cypriot Government to pay €29,000 to four Greek Cypriot buyers for allowing their case to drag on in Cypriot courts for more than two decades.
One thing is clear – protecting the buyer is not a priority for the Cyprus government, the Cyprus banks or the property developers. When a developer goes bankrupt an individual without a Title Deed faces the risk of losing everything. The banks have the right to claim the collateral and property buyers will be left homeless and tens of thousands of pounds worse off.
(The UK Government is expected to reply to Lord Jones’ questions by 25th June).